UK Secretary of State for Energy and Climate Change Chris Huhne is being urged by green groups to resist cuts to feed-in tariffs (FITs) ahead of a keynote speech today at the Liberal Democrat party conference.
Friends of the Earth and other green groups are concerned that Huhne will come under pressure from the Treasury to make cuts to FITs and drop plans for a Renewable Heat Incentive (RHI) following the spreading review next month.
“It’s absurd that the Treasury is even reviewing FIT payments because the scheme isn’t financed by taxpayers, and there is already a planned review in two years time,” says campaign director Craig Bennett.
“Huhne must stand firm and allow councils, communities and businesses to benefit from green energy revolution.”
According to a report out today from the group, which has been put together by building experts ARUP, councils, schools, households and businesses can make a guaranteed income and reduce fuel bills by generating electricity from small scale renewable energy systems under the FIT scheme.
“Our report shows that FITs now make many renewable technologies an attractive investment for a wide range of public and private sector groups who were previously excluded from the renewable energy market,” says ARUP director Mark Watts.
For example, a 1.5 MW wind turbine could generate a 15.9% return on investment for a community group and pay for itself in seven years.
Similarly, a housing association could earn over £7500 a year by installing 20 kW solar panels on the roof of a block of flats.
Councils, community groups and housing associations could also use the income to fund additional energy efficiency programmes like insulating homes, says the report.
Friends of the Earth and ARUP warn that changes to the FIT and abandoning plans for an RHI could damage investor confidence in the UK.
“The chief benefit of the FIT and proposed RHI is offering investors the certainty of a long-term commercial return,” says Watts, “but it will only be possible to judge how much of an incentive it provides after a year or two of operation.”
Critics of the scheme argue that FITs are one of the most expensive ways of subsidising renewables and the investment could be better spent elsewhere. However, proponents of the scheme say it can drive the decentralisation of energy generation and a recent study indicates that FITs are responsible for three-quarters of solar installations around the globe.
For further information:
Feed-in tariffs responsible for 75% of solar deployment, says study (11-Aug)
Local councils join microgeneration bandwagon, but is policy sound? (10-Aug)
UK local councils free to cash in renewable generation (9-Aug)
Feed-in tariff will increase UK solar PV market five-fold, says PricewaterhouseCoopers (8-Jun)
UK feed-in tariffs will benefit homes but not businesses, say critics (2-Feb)
21 September 2010